Canadian Natural earnings soar in first quarter

<a href=www.thestar.com>Toronto Star May. 8, 2003. 07:11 AM

CALGARY—Canadian Natural Resources Ltd., the country's Number 3 oil explorer, said yesterday first-quarter profit quadrupled due to sky-high oil and gas prices that have led to stellar results across the industry.

Canadian Natural, with operations at home, in the North Sea and offshore west Africa, also said it was proceeding with engineering work on its $8.5 billion Alberta oil-sands project while pressing Ottawa for more details on the long-term impact of the Kyoto climate change accord on costs.

It earned $428 million, or $3.19 a share, in the quarter, up from year-earlier $99 million, or 81 cents a share. That handily beat the average earnings estimate of $2.35 a share among analysts polled by Thomson First Call.

Cash flow, giving a glimpse into an oil company's ability to fund development, was $906 million, or $6.76 a share, up from $359 million, or $2.95 a share.

Canadian Natural, the biggest of several companies that count Calgary financier Murray Edwards as a major investor, joined a raft of oil firms with huge first-quarter profit.

Results were driven by oil prices that jumped 55 per cent as markets fretted over supplies ahead of the Iraq war and during a protracted strike in Venezuela that crippled exports from the OPEC producer.

North American natural gas prices more than doubled due to cold winter weather and depleting inventories.

The stock fell 20 cents to $50.20 in Toronto yesterday. It has risen 25 per cent in the past year, outpacing the TSX oil group, which is up 12 per cent.

Chairman Allan Markin said his company completed its busiest-ever drilling program in the quarter with 749 wells and a 94 per cent success rate.

Canadian Natural produced 1.3 billion cubic feet of natural gas a day, up from year-earlier 1.1 billion. Oil and gas liquids output averaged 237,560 barrels a day, up from 188,439.

Volumes increased in North America, off Ivory Coast and in the North Sea, where it acquired additional stakes in some of its projects, it said.

It said it expects production to average 1.28 billion to 1.3 billion cubic feet a day of gas in 2003, 240,000 to 260,000 barrels of oil and gas liquids a day.

Canadian Natural said it was working with the Canadian government to determine the costs of implementing Kyoto after 2012 as it moved toward a decision on the 232,000 barrel a day Horizon oil-sands development in northern Alberta.

The company said it was optimistic it would get necessary assurances before deciding on major spending in 2004.